PDD Holdings Announces First Quarter 2023 Unaudited Financial Results
May 26, 2023
DUBLIN and SHANGHAI, May 26, 2023 (GLOBE NEWSWIRE) -- PDD Holdings Inc. (“PDD Holdings” or the “Company”) (NASDAQ: PDD), today
announced its unaudited financial results for the first quarter ended March 31, 2023.
First Quarter 2023 Highlights

Total revenues in the quarter were RMB37,637.1 million (US$15,480.4 million), an increase of 58% from RMB23,793.7
million in the same quarter of 2022.
Operating profit in the quarter was RMB6,929.0 million (US$1,008.9 million), an increase of 222% from RMB2,154.4
million in the same quarter of 2022. Non-GAAP2 operating profit in the quarter was RMB8,462.4 million (US$1,232.2
million), an increase of 130% from RMB3,677.2 million in the same quarter of 2022.
Net income attributable to ordinary shareholders in the quarter was RMB8,101.0 million (US$1,179.6 million), an
increase of 212% from RMB2,599.5 million in the same quarter of 2022. Non-GAAP net income attributable to ordinary
shareholders in the quarter was RMB10,126.4 million (US$1,474.5 million), an increase of 141% from RMB4,200.4 million
in the same quarter of 2022.
“Technology is the cornerstone of sustainable and inclusive growth that creates positive value for society,” said Mr. Lei Chen, Chairman and Co-Chief
Executive Officer of PDD Holdings. “We will channel more resources to R&D as it is the key catalyst in driving efficiency and uncovering opportunities.”“We are entering a new phase of development where we are fully committed to fostering high-quality growth and further strengthening our ecosystem,”said Mr. Jiazhen Zhao, Executive Director and Co-Chief Executive Officer of PDD Holdings. “We are launching a dedicated ‘10 Billion Ecosystem
Initiative’ to facilitate an environment where quality merchants can flourish.”“Patient investment is essential for us to promote ecosystem vibrancy and sustainability,” said Ms. Jun Liu, VP of Finance at PDD Holdings. “We arestill in the investment stage, and we plan to step up our investment to further support quality growth.”_________________________
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience ofthe reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.8676 to US$1.00, the noon buying rate in effect on
March 31, 2023 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of certain investments, and interest
expenses related to the convertible bonds’ amortization to face value. See “Reconciliation of Non-GAAP Measures to The Most Directly Comparable
GAAP Measures” set forth at the end of this press release.
First Quarter 2023 Unaudited Financial Results
Total revenues were RMB37,637.1 million (US$5,480.4 million), an increase of 58% from RMB23,793.7 million in the same quarter of 2022. The
increase was primarily due to an increase in revenues from online marketing services and transaction services.

Revenues from online marketing services and others were RMB27,244.4 million (US$3,967.1 million), an increase of
50% from RMB18,202.3 million in the same quarter of 2022.
Revenues from transaction services were RMB10,392.6 million (US$1,513.3 million), an increase of 86% from
RMB5,591.4 million in the same quarter of 2022.
Total costs of revenues were RMB11,125.3 million (US$1,620.0 million), an increase of 55% from RMB7,159.6 million in the same quarter of 2022.
The increase mainly came from the increased fulfilment fees and payment processing fees.
Total operating expenses were RMB19,582.7 million (US$2,851.5 million), an increase of 35% from RMB14,479.7 million in the same quarter of2022. The increase was primarily due to an increase in sales and marketing expenses.

Sales and marketing expenses were RMB16,259.7 million (US$2,367.6 million), an increase of 45% from RMB11,219.1
million in the same quarter of 2022, mainly due to the increased spending in promotion and advertising activities.
General and administrative expenses were RMB816.4 million (US$118.9 million), an increase of 38% from RMB592.1
million in the same quarter of 2022, primarily due to an increase in staff related costs.
Research and development expenses were RMB2,506.7 million (US$365.0 million), a slight decrease of 6% from
RMB2,668.5 million in the same quarter of 2022.
Operating profit in the quarter was RMB6,929.0 million (US$1,008.9 million), an increase of 222% from RMB2,154.4 million in the same quarter of2022. Non-GAAP operating profit in the quarter was RMB8,462.4 million (US$1,232.2 million), an increase of 130% from RMB3,677.2 million in thesame quarter of 2022.

Net income attributable to ordinary shareholders in the quarter was RMB8,101.0 million (US$1,179.6 million), an increase of 212% from
RMB2,599.5 million in the same quarter of 2022. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB10,126.4
million (US$1,474.5 million), an increase of 141% from RMB4,200.4 million in the same quarter of 2022.
Basic earnings per ADS was RMB6.13 (US$0.89) and the diluted earnings per ADS was RMB5.55 (US$0.81), compared with basic earnings per
ADS of RMB2.06 and diluted earnings per ADS of RMB1.84 in the same quarter of 2022. Non-GAAP diluted earnings per ADS was RMB6.92(US$1.01), compared with RMB2.95 in the same quarter of 2022.
Net cash generated from operating activities was RMB1,338.0 million (US$194.8 million), compared with net cash used in operating activities of
RMB9,068.1 million in the same quarter of 2022, mainly due to the increase in net income and the changes in working capitals.
Cash, cash equivalents and short-term investments were RMB157.0 billion (US$22.9 billion) as of March 31, 2023, compared with RMB149.4
billion as of December 31, 2022.
Conference Call
The Company’s management will hold an earnings conference call at 7:30 AM ET on May 26, 2023 (12:30 PM IST and 7:30 PM HKT on the sameday).
The conference call will be webcast live at https://investor.pddholdings.com/investor-events. The webcast will be available for replay at the same
website following the conclusion of the call.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating profit and non-GAAP net income
attributable to ordinary shareholders, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordancewith accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude
share-based compensation expenses, fair value change of certain investments, and interest expenses related to the convertible bonds’ amortization to
face value.
The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance andformulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding
the impact of share-based compensation expenses, fair value change of certain investments, and interest expenses related to the convertible bonds’
amortization to face value, which are non-cash charges. The Company also believes that the non-GAAP financial measures could provide further
information about the Company’s results of operations, and enhance the overall understanding of the Company’s past performance and future
prospects.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial
measures have limitations as analytical tools. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that
affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP
measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may belimited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performancemeasure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial
information in its entirety and not rely on a single financial measure.
For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to The Most
Directly Comparable GAAP Measures” set forth at the end of this press release.
Safe Harbor Statements
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,”“future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the businessoutlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking
statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange
Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company’s beliefs andexpectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s
growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide
products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely onmerchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies
and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s and global e-commerce markets;changes in its revenues and certain cost or expense items; the expected growth of China’s and global e-commerce markets; PRC governmental
policies and regulations relating to the Company’s industry, and general economic and business conditions globally and in China and assumptions
underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All
information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to
update any forward-looking statement, except as required under applicable law.
About PDD Holdings
PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. PDD Holdings aims to bring more businesses andpeople into the digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities.

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December31, 2022
RMB

March 31, 2023
RMB

US$
(Unaudited)

ASSETS
Current assets
Cash and cash equivalents
Restricted cash
Receivables from online payment platforms
Short-term investments
Amounts due from related parties
Prepayments and other current assets

34,326,192
57,974,225
587,696
115,112,554
6,318,830
2,298,379

19,771,265
50,898,735
693,111137,263,553
4,896,517
2,287,742

2,878,919
7,411,430
100,925
19,987,121
712,988
333,121

Total current assets

216,617,876

215,810,923

31,424,504

Other non-current assets

1,044,847
134,002
1,416,081
1,045,030
16,862,117

948,095
23,403
1,640,361
1,298,602
20,344,866

138,053
3,408
238,855
189,091
2,962,442

Total non-current assets

20,502,077

24,255,327

3,531,849

Total Assets

237,119,953

240,066,250

34,956,353

Non-current assets
Property, equipment and software, net
Intangible assets
Right-of-use assets
Deferred tax assets

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December31, 2022
RMB

March 31, 2023
RMB

US$
(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Amounts due to related parties
Customer advances and deferred revenues
Payable to merchants
Accrued expenses and other liabilities
Merchant deposits
Convertible bonds, current portion
Lease liabilities

1,676,391
1,389,655
63,316,695
20,960,723
15,058,229
13,885,751
602,036

1,960,013
1,543,135
55,878,527
21,515,816
15,683,470
13,712,209
729,446

285,400
224,698
8,136,544
3,132,944
2,283,690
1,996,652
106,216

Total current liabilities

116,889,480

111,022,616

16,166,144

Deferred tax liabilities

1,575,755
870,782
13,025

1,554,736
978,399382

226,387
142,466
56

Total non-current liabilities

2,459,562

2,533,517

368,909

119,349,042

113,556,133

16,535,053

Non-current liabilities
Convertible bonds
Lease liabilities

Total Liabilities

Shareholders’ equity
Ordinary shares
Additional paid-in capital
Statutory reserves
Accumulated other comprehensive income
Retained earnings

170
99,250,468
5,000
3,322,238
15,193,035

171
100,784,131
5,000
2,426,753
23,294,062

25
14,675,306
728
353,363
3,391,878

Total Shareholders’ Equity

117,770,911

126,510,117

18,421,300

Total Liabilities and Shareholders’ Equity

237,119,953

240,066,250

34,956,353

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands of RMB and US$)For the three months ended March 31,
2022

2023

RMB
(Unaudited)
23,793,689(7,159,595)

RMB(Unaudited)
37,637,050(11,125,285)

US$(Unaudited)
5,480,379(1,619,967)

16,634,094

26,511,765

3,860,412(11,219,068)(592,113)(2,668,507)(16,259,688)(816,402)(2,506,657)(2,367,594)(118,877)(364,998)(14,479,688)(19,582,747)(2,851,469)

2,154,406

6,929,018

1,008,943

796,261(12,640)
20,084
239,770

1,463,599(11,687)(16,037)
1,227,520

213,117(1,702)(2,335)
178,741

Income tax expenses

3,197,881(33,616)(564,814)

9,592,413
106,389(1,597,775)

1,396,764
15,491(232,654)

Net income

2,599,451

8,101,027

1,179,601

Revenues
Costs of revenues
Gross profit
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Operating profit
Interest and investment income, net
Interest expenses
Foreign exchange gain/ (loss)
Other income, net

Profit before income tax and share of results of equity investees
Share of results of equity investees

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended March 31,
2022
RMB(Unaudited)

2023
RMB
(Unaudited)

US$(Unaudited)

Net income

2,599,451

8,101,027

1,179,601

Net income attributable to ordinary shareholders

2,599,451

8,101,027

1,179,601

Earnings per ordinary share:

-Basic-Diluted

0.52
0.46

1.53
1.39

0.22
0.20

2.06
1.84

6.13
5.55

0.89
0.81

5,036,733
5,688,094

5,282,720
5,850,378

5,282,720
5,850,378

Earnings per ADS (4 ordinary shares equals 1 ADS ):-Basic-Diluted
Weighted average number of outstanding ordinary shares (in thousands):-Basic-Diluted

PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended March 31,
2022
RMB(Unaudited)
Revenues- Online marketing services and others- Transaction services
Total

2023
RMB
(Unaudited)

US$(Unaudited)

18,202,282
5,591,407

27,244,426
10,392,624

3,967,096
1,513,283

23,793,689

37,637,050

5,480,379

PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended March 31,
2022
RMB(Unaudited)
Share-based compensation costs included in:
Costs of revenues
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total

2023
RMB
(Unaudited)

US$(Unaudited)

9,181
501,105
383,296
629,168

37,368
488,773
478,062
529,199

5,441
71,171
69,612
77,057

1,522,750

1,533,402

223,281

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of RMB and US$)For the three months ended March 31,
2022

Net cash (used in)/ generated from operating activities
Net cash used in investing activities
Net cash generated from financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash

RMB
(Unaudited)(9,068,096)(4,852,089)
43
10,163

2023
RMB(Unaudited)
1,338,022(22,620,247)
53(348,245)

US$(Unaudited)
194,831(3,293,763)
8(50,709)

Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period(13,909,979)
66,043,971(21,630,417)
92,300,417(3,149,633)
13,439,982

Cash, cash equivalents and restricted cash at end of period

52,133,992

70,670,000

10,290,349

PDD HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended March 31,
2022

Operating profit
Add: Share-based compensation

2023

RMB
RMB
US$
(Unaudited)(Unaudited)(Unaudited)
2,154,406
6,929,018
1,008,943
1,522,750
1,533,402
223,281

Non-GAAP operating profit

3,677,156

8,462,420

1,232,224

Net income attributable to ordinary shareholders
Add: Share-based compensation
Add: Interest expenses related to convertible bonds’ amortization to face value
Add: Loss from fair value change of certain investments

2,599,451
1,522,750
12,64065,6008,101,027
1,533,402
11,687480,276

1,179,601
223,281
1,702
69,934

Non-GAAP net income attributable to ordinary shareholders

4,200,441

10,126,392

1,474,518

Non-GAAP diluted weighted-average number of ordinary shares outstanding (inthousands)

5,688,094

5,850,378

5,850,378

Add: Non-GAAP adjustments to earnings per ordinary share

0.46
0.28

1.39
0.34

0.20
0.05

Non-GAAP diluted earnings per ordinary share

0.74

1.73

0.25

Non-GAAP diluted earnings per ADS

2.95

6.92

1.01

Diluted earnings per ordinary share

For investor and media inquiries, please contact: investor@pddholdings.com media@pddholdings.com